PHILADELPHIA (KYW Newsradio) — The Pennsylvania agency that helps low-income families get into affordable housing is being accused of forcing some families out of homes they own. Housing advocates say a recent rule change is increasing the number of foreclosures.

Luz Lugo, housing counselor from HACE CDC talks about how PHFA’s lien policy is costing people their homes.

“I fell behind on my mortgage due to the passing of my father,” said Lisa McKenzie, who was so upset about possibly losing her home she could barely speak about it.

Lisa McKenzie mother of 7, speaks about how a water lien is pushing her to foreclosure.

But her story is similar to several others shared at a news conference held to protest the Pennsylvania Housing Finance Agency requirement that homeowners clear all other debt secured by their homes before they can modify their mortgages to avoid foreclosure.

“I’m just asking for PHFA to find in their heart to help me get a loan modification,” McKenzie said.

McKenzie’s loan modification was turned down because she owes the water department money. She’s in a payment plan with the department, but PHFA requires the entire debt to be paid.

PHFA spokesman Scott Elliot says that is a requirement of federal and state law.

“When there’s other debt, we are stuck,” he said, adding that 90 percent of the other debt is owed to the water department or Philadelphia Gas Works.

According to Elliot, the agency has modified 500 loans in Philadelphia in the last two years, and less than two dozen were scuttled by the requirement. He says those homeowners have been offered loans up to $1,500 to clear the other debt.

But Irwin Trauss, supervising attorney for the consumer housing unit of Philadelphia Legal Assistance, says the loans are only available if they cure 100 percent of the debt, and some homeowners owe much more than that.

Irwin Trauss of Philadelphia Legal Assistance chaired the event.

He says he plans to go to Harrisburg to ask PHFA to be more lenient.

“PHFA is doing this on a wholesale basis and there is no reason for them to do so,” Trauss said.